Segment Information

The Company has six operating segments which are aggregated into three reportable segments: Industrial, Process and Contractor.

The Industrial segment includes our Industrial Products and Applied Fluid Technologies divisions. The Industrial segment markets equipment and pre-engineered packages for moving and applying paints, coatings, sealants, adhesives and other fluids. Markets served include automotive and vehicle assembly and components production, wood and metal products, rail, marine, aerospace, farm, construction, bus, recreational vehicles and various other industries.

The Process segment includes our Process, Oil and Natural Gas, and Lubrication divisions. The Process segment markets pumps, valves, meters and accessories to move and dispense chemicals, oil and natural gas, water, wastewater, petroleum, food, lubricants and other fluids. Markets served include food and beverage, dairy, oil and natural gas, pharmaceutical, cosmetics, electronics, wastewater, mining, fast oil change facilities, service garages, fleet service centers, automobile dealerships and industrial lubrication applications.

The Contractor segment markets sprayers for architectural coatings for painting, corrosion control, texture and line striping.

The accounting policies of the segments are the same as those described in the summary of significant accounting policies. The cost of manufacturing for each segment is based on product cost, and expenses are based on actual costs incurred along with cost allocations of shared and centralized functions based on activities performed, sales or space utilization. Depreciation expense is charged to the manufacturing or operating cost center that utilizes the asset, and is then allocated to segments on the same basis as other expenses within that cost center. Reportable segments are defined by product. Segments are responsible for development, manufacturing, marketing and sales of their products. This allows for focused marketing and efficient product development. The segments share common purchasing, certain manufacturing, distribution and administration functions.

Segments information follows (in thousands):



	2017			2016			2015
Net Sales
Industrial	$	691,978		$	629,581		$	616,069
Process	294,652			266,630			273,631
Contractor	488,114			433,082			396,785
Total	$	1,474,744		$	1,329,293		$	1,286,485
Operating Earnings
Industrial	$	237,700		$	207,183		$	201,749
Process	52,216			35,750			43,833
Contractor	113,898			91,837			86,447
Unallocated corporate (expense)	(43,367		)	(28,871		)	(29,904		)
Impairment	—			(192,020		)	—
Total	$	360,447		$	113,879		$	302,125
Assets
Industrial	$	572,436		$	546,366
Process	345,572			318,444
Contractor	255,615			208,016
Unallocated corporate	205,582			170,283
Total	$	1,379,205		$	1,243,109

Management assesses performance of segments by reference to operating earnings excluding unallocated corporate expenses and asset impairments. Unallocated corporate (expense) includes such items as stock compensation, divestiture and certain acquisition transaction costs, bad debt expense, charitable contributions, certain portions of pension expense and certain central warehouse expenses. Unallocated assets include cash, allowances and valuation reserves, deferred income taxes, certain capital and other assets.

Geographic information follows (in thousands):



	2017		2016		2015
Net Sales (based on customer location)
United States	$	743,344	$	685,981	$	653,534
Other countries	731,400		643,312		632,951
Total	$	1,474,744	$	1,329,293	$	1,286,485
Long-lived Assets
United States	$	163,416	$	151,911
Other countries	40,882		37,685
Total	$	204,298	$	189,596

Sales to Major Customers. Worldwide sales to one customer in the Contractor and Industrial segments individually represented over 10 percent of the Company’s consolidated sales in 2017, 2016 and 2015.